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Songwriters Demand Fair Pay from AM/FM Radio at Hearing

There aren’t many areas where songwriters and streaming music services agree, especially when it comes to royalty payments. But both parties were united in one voice this week, as the call for terrestrial radio stations to pay for the music they use grew stronger.

Rosanne Cash at the South by Southwest Festival 2006. (Photo credit: Wikipedia)

The conversation was part of a wider reconsideration of Title 17, a section of the United States Code that covers copyright law.

The House of Representatives Judiciary Committee, chaired by intellectual property advocate Bob Goodlatte, heard opinions from the following industry voices on the subject of what constitutes fair pay for artists:

Ed Christian (Chairman of the Radio Music License Committee Inc. – RMLC)

Darius Van Arman (Co-Founder of Secretly Group, o/b/o the American Association of Independent Music – A2IM)

Songwriter Paul Williams (President of the American Society of Composers, Authors and Publishers – ASCAP)

Michael Huppe (President & CEO of SoundExchange

Chris Harrison (VP of Business Affairs at Pandora Media Inc.)

David Frear (CFO of Sirius XM)

The central theme of the hearing tended towards one theme: fair pay for songwriters across all media and platforms.

Where opinions diverged was on the thorny subject of royalties paid (or lack thereof) by AM and FM radio stations, which have a longstanding exemption from such payments that dates back many decades.

Back when radio was almost the only way new artists could receive exposure, the broadcasters successfully negotiated their way out of royalty payments. The logic, which in some ways held up at the time, was that the promotional value of being selected for airplay was significant enough to do away with the legal performance royalty requirements. Studies in the 70s proved the dramatic impact that nationwide radio play had on record sales, the stations say, and their exemption is well deserved.

Unfortunately, as many speakers noted and what is making the songwriters demand fair pay, the truth is those days are long gone.

Listeners are moving away from ownership and towards streaming, while broadcast radio is a fraction of the power if once was, usurped now by online radio stations and those same streaming services. Representatives of the latter argued that it was an outdated concept that results in an unbalanced playing field. The songwriters on the panel, long friends of radio play and who would generally cast a wary eye at streaming services, whose payment rates are often criticized for being too low, this time found some common ground with the likes of Mr. Huppe and Mr. Harrison.

Radio Blaupunkt (Photo credit: peetje2)

Rosanne Cash called for fair compensation across all media, while at the same time saying that it should be songwriters who have the final decision on who can use their music and in what circumstances. Paul Williams held similar views and made polite calls for greater transparency, holding up sync licensing as an equitable example of fair pay with a 50/50 split. Despite previous disagreements between his organization, ASCAP, and Pandora Music, he sided with the streaming companies on the point of radio royalties and confirmed his belief that “”we can trust the business to work it out!”

For streaming radio it’s a simple concept that Pandora’s representative boiled down to this: Pay all creators equitably, across all platforms. Play the same and pay the same. The representatives of broadcast radio, Mr. Warfield Jr and Mr. Christian obviously moved to defend their position, continuing the line that artists have long benefited from their services and continue to do so.

The “promotional value” argument was wearing thin with both players and politicians, however, and only the desire to not financially cripple an ailing industry that still benefits communities with free information and entertainment stood out as a vaguely compelling argument for not forcing royalties on traditional radio.

There were some excellent exchanges and you can watch the full webcasts here and here, which feature some insightful moments from all participants.

The views of Ms. Cash and Mr. Williams are particularly impassioned, and the creative community is lucky to have them as respected, eloquent voices in this noisy debate.